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Cryptocurrency is booming in the world and the shock waves are reaching Cambodia. But what is Bitcoin and why should it matter here? In this article we attempt to explain some of the basics to understanding Bitcoin.
Bitcoin technology is wide-reaching and complex. We will only discuss a few basic concepts to help you begin your research.
What is Bitcoin?
Simply speaking, Bitcoin is money for the Internet. It is a digital token of value that can be transmitted on the Bitcoin network to anyone in the world, instantly, and almost for free.
Why is Bitcoin Special?
Bitcoin is the world’s first securely decentralized peer-to-peer digital money system. In most implementations of digital money a 3rd party is required to oversee transactions and steward funds. With Bitcoin, no single entity controls the system and there is no 3rd party risk. The network is decentralized (similar to the Internet itself) and nearly impossible to defraud or compromise.
How is Bitcoin Secure?
Bitcoin is a protocol for broadcasting data to the internet. A protocol is just a set of rules that govern a closed system. Everyone must obey the same rules if they wish to participate in the system. Anyone who follows different rules cannot communicate with other participants in the system. It would be like speaking a language that no one around you understands!
Consider the world wide web. It is based on a protocol called HTTP. If you want to read webpages you must use a browser that follows the HTTP protocol rules. If your browser does not follow the consensus protocol rules, you cannot speak or understand the language of the web!
The Bitcoin protocol works similarly to HTTP. Anyone who violates the rules of the Bitcoin protocol simply cannot participate on the network. Participants on the network are rewarded by following the protocol rules. On the other hand, fraudulent transactions which do not follow the rules are simply ignored by the network.
Where Can I Find More Information?
CryptoAsia has published an article about how to start using Bitcoin. It includes great information for beginners with links to online resources. Until then, there are many great Bitcoin videos on Youtube, including the one below. Enjoy!